One of the largest manufacturers of aluminium in the world, Novelis Inc., stated that it will not take Russian aluminium in any prospective new contracts to supply its European facilities in the coming years. This decision might set the tone for future contract discussions throughout the sector.
Russia is a major producer of aluminium, nickel, and copper, all of which have not been sanctioned by Europe or the United States. Although many in the industry, particularly in Europe, have avoided Russian metal since the Ukraine invasion, global trade continues through multi-year or annual deals already in place when the conflict began.
As one of the world's major aluminium manufacturers, Novelis has placed a bid on 2023 supply to its European plants that prohibits any Russian metal from being used as part of any deal, a company spokesperson informed. In response to queries, Novelis confirmed that it issued a tender to its European manufacturing plants this week. It prohibits Russian metal from being used as part of any deal.
Traders and manufacturers are currently preparing for mating season, a period when they negotiate the following year's supply of aluminium. Russian metal is primarily bought in Europe, and if others follow Novelis's lead, Russian producers will have to find new clients, resulting in a widespread reworking of current trade relationships.
The talks will occur against rising pressure on European aluminium supply. Soaring energy costs squeeze margins in the energy-intensive industry, forcing smelters to reduce or halt production, increasing the region's import dependence.
Responses
